SEBI sets seven-board cap for independent directors

Under the new Corporate Governance rules, an individual can serve as an independent director on a maximum of seven listed companies. The Securities & Exchange Board of India (SEBI) also decided that if an individual is a whole-time director in a listed company, he can serve as an independent director in a maximum of three companies. Also, if one has completed five years or more as an independent director, he will be eligible for just one more term of five years. Managerial remuneration will be decided by a compensation committee headed by an independent director. The board has also decided that the definition of related-party transactions will be widened. SEBI said that there will be voting (by the shareholders) in which the related party cannot vote.